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Australia and China's leaders agree to work together on clean energy and carbon trading

MELBOURNE:Australian Prime Minister Julia Gillard agreed a ‘strategic partnership’ with Chinese President Xi Jinping during her visit to China last week, where they signed a bi-lateral agreement on carbon trading.

China has long been Australia’s largest trading partner and importer of Australia’s energy products, and Prime Minister Gillard’s visit aimed to bolster ties with the country. In a successful result, the leaders have agreed to meet annually under the new Sino-Australia partnership.

Prime Minister Gillard told a press conference: ''Right around the world countries are competing for China's attention... we won't have to compete every time to get to the table, we'll be there at the table working on the issues that deeply matter to both of us.''

Among their plans, the partnership will connect China and Australia’s efforts on tackling climate change and accelerating low carbon growth, specifically around carbon trading. PM Gillard added: “We’ve committed ourselves to work together on the shared challenge of carbon pollution and climate change through a carbon-trading experts group.”

The expert group will be formed at a pivotal moment, as China is currently planning to launch pilot carbon markets in five cities and two major provinces, starting in June. It could overtake the European Union ETS to become the largest carbon emissions trading scheme in the world, according to NDRC Vice Chairman Xie. The pilot scheme will apply to Chinese companies emitting over 10,000 tons of carbon annually, which is less than Australia's 25,000 ton threshold.

During the Australian Prime Minister's visit to China, a US$1.6 billion deal was also signed for Hydro Tasmania and China's Shenhua Group to develop wind farms in Australia.

Australia’s admiration for China’s climate efforts was highlighted at a key Ministerial Dialogue in Sydney last month, when Australia's climate change minister Greg Combet described China's mitigation efforts as a model for other nations to follow. He said: "In 2005, China had next to no renewable industry. It now leads the world in wind, solar and hydro power. China is the world leader when it comes to renewable energy investment. And two weeks ago, for the first time ever, China made public its detailed plan to implement a nation-wide emissions trading scheme."

Changhua Wu, Greater China Director, The Climate Group said: “Together with other countries in Asia, China is ready to explore new models of sustainable development. This will not be at the expense of other countries' interests nor at the cost of access to their own welfare. China will make the contribution to the clean revolution in cooperation with other countries in Asia-Pacific, and hopefully the whole world.”

Caroline Bayliss, Australia Director, The Climate Group, said: “The Climate Group is pleased to see that discussions around renewable energy, carbon pricing and clean technology opportunities have formed such an important part of the dialogue. The high level annual Ministerial Dialogue provides a platform for broader and deeper engagement between China and Australia, where a commitment to low carbon leadership is as central as issues of trade and security.